Category Archives: Information

FTC Rules TurboTax Maker Intuit Deceived Users With Offers of “Free” Tax Products

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A Federal Trade Commission judge on Friday issued an initial ruling against Intuit, the maker of the popular tax filing software against Intuit, the maker of the popular tax filing software TurboTax, saying the company deceived consumers with ads for so-called “free” tax products. CNBC reported.

According to CNBC, Intuit violated Section 5 of the FTC Act by promoting “free” tax products and services for which many were ineligible, according to Chief Administrative Law Judge D. Michael Chappell. The full commission will review the judgement before delivering a final decision.

Intuit will appeal the ruling, said Rick Heineman, a spokesperson for the company.

The Verge reported the FTC’s ruling includes pages of commercials and online ads that advertised its “Free Edition” software. While the name implies that the service is, well, free, people wound up having to pay to use it – sparking a lawsuit from the FTC and a $141 million payout to affected users.

Meanwhile, Intuit’s actually no-cost Free File version, which it launched in partnership with with the IRS, remained exceedingly difficult to find. In 2021, Intuit exited the program after the IRS stopped letting companies hide their free filing services from search engines.

The FTC posted a release titled: “Administrative Law Judge Issues Initial Decision in FTC’s Case Against Intuit Inc”. From the release (which was issued on September 8):

In an initial decision announced today, the Federal Trade Commission’s Chief Administrative Law Judge (ALJ), D. Michael Chappell, ruled that Intuit Inc. (Intuit), the maker of the popular TurboTax tax filing software, “engaged in deceptive advertising in violation of Section 5 of the FTC Act” and deceived customers were ineligible.

In ruling in favor of complaint counsel – FTC staff in the Bureau of Consumer Protection – the ALJ also found that there is a “cognizant danger of a recurring violation” by Intuit, and issued an order requiring the company to cease-and-desist from engaging in the deceptive practices alleged in the complaint.

Under the terms of ALJ’s which can be appealed to the full Commission, Intuit is “prohibited from engaging in any deceptive practices in the future.” It is also barred from representing that any good or service is free, unless: 1) it is free for all consumers; 2) it clearly and conspicuously discloses any terms that would limit the offer and might be misunderstood by consumers; and 3) the good or service is not free “to a majority of U.S. taxpayers,” this also must be disclosed in a clear and conspicuous manner…

ArsTechnica reported that the FTC commissioners will likely rule against Intuit, which issued a statement indicating that it will take the matter to federal court. The order would be in effect for 20 years if it survives appeal.

According to ArsTechnica, the response from Intuit noted that the administrative law judge is “an employee of the FTC” and “ruled in favor of the FTC in the agency’s own lawsuit.” The FTC filed an administrative complaint against Intuit in March of 2022.

“Intuit will appeal this groundless and seemingly predetermined decision by the FTC to rule in its own favor and is confident that when the matter ultimately returns to a neutral body Intuit will prevail, as it has previously in this matter,” the company said.

In my opinion, I think Intuit probably could have avoided this problem if it had been honest in their commercials. The company should not have made seem as though consumers would be able to easily access the free version of their product.

Coinbase Introduces The Stand With Crypto Alliance

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Coinbase has introduced the Stand With Crypto Alliance. It starts with a “TL;DR” (posted yesterday) that said: Today marks the launch of the Stand with Crypto Alliance, an advocacy organization focused on mobilizing the crypto community to directly engage in the legislative process. Join the Alliance to help secure the future of crypto in America by helping drive clear, sensible regulation.”

From the Coinbase blog:

With more than 50 million Americans holding a digital asset, crypto is bigger than Coinbase. Today, with the launch of the Stand with Crypto Alliance, the crypto community will be unleashed as a core constituency in the legislative process.

In particular, the Stand with Crypto Alliance will leverage the underlying technology of the blockchain to help organize the community into a powerful voice advocating for policies that will update our financial system and support economic empowerment. The Alliance is the nation’s first ever independent and unchain advocacy organization, powered by and for crypto supporters.

Building on recent historic, bipartisan legislative momentum in Congress, the Stand with Crypto Alliance is crypto’s first true grassroots movement that will be organized onchain. By providing a launch pad, the Alliance is mobilizing the full force of the decentralized crypto community to tell lawmakers: Recess is over. America’s crypto constituency is strong – and will be holding them accountable this fall when Congress votes on common-sense legislation to protect consumers and their right to crypto…

The Block reported that crypto advocated have ramped up efforts over the past few months to get legislation passed that would improve regulation of the crypto industry in the country. Some have criticized regulators, like the Securities and Exchange Commission, for what they call a regulation by enforcement approach.

Two bills are teed up to be voted on in the full House, including one bill that would direct regulators to create a clear path for how a digital asset can transition from being a security to a commodity. The other would create a comprehensive framework to regulate payment stablecoins. Both passed certain House committees last month.

CNN reported that the Stand with Crypto Alliance’s primary mission is to mobilize support for legislation that would create a US regulatory framework for digital assets – something of a sore subject in the feud between crypto advocates and US regulators, who have fundamental disagreements about how the industry should operate.

According to CNN, a central sticking point is the question of how crypto tokens should be regulated. The Securities and Exchange Commission, Wall Street’s top cop, contends that most crypto products are investment contracts and therefore fall under its jurisdiction – an argument the crypto industry is fighting.

CNN also reported that crypto adoption has been growing, though it remains far from the mainstream and still lacks obvious use cases for most people. The promise of crypto, broadly, is a world in which financial transactions can be executed instantly, free of charge. Advocates envision blockchain, the infrastructure on which crypto is built, as the future of all global finance.

In my opinion, it seems unlikely that the U.S. Securities and Exchange Commission will accept the Stand with Crypto Alliance. CNN reported that in June, the SEC escalated its enforcement campaign when it sued both Coinbase and Binance, the world’s top two crypto exchanges, saying the companies are illegally selling securities on unregistered exchanges.

UK’s Ofcom Charts Demise of Broadcast TV

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The UK’s Ofcom has delivered its latest Media Nations report and it is full of interesting detail on the watching and listening behaviours of the British public over the past decade. It’s great reading for streaming services but the future’s pretty grim for broadcast TV.

As a bit of background for non-UK residents, Ofcom is the regulation and competition authority in UK for all communication services, including TV, radio, telephony, broadband, post and so on. It’s an abbreviation of “Office of Communications” and is roughly equivalent to US FCC. The main terrestrial broadcasters are BBC, ITV, Channel 4 and 5. Sky provides satellite services and channels, with Virgin and BT providing cable-based services. Radio is provided by BBC, Bauer and Global plus many smaller stations.

The full report, Media Nations UK 2023, runs to 72 pages and it’s a goldmine of information on the changing habits of the nation with loads of good graphics. It’s definitely worth a read but here are a few highlights

  • Broadcast, scheduled or linear TV is in significant decline. Viewing fell by 12% year on year and is 16% lower than pre-pandemic. Programmes that attract more than four million viewers have halved since 2014. In 2012, under 25s watched around 150 minutes of TV per day. In 2022, it was about 40 minutes.
  • Two-thirds of UK households have at least one video streaming service on demand, such as Netflix or Disney+. It’s a slight fall over the previous year which suggests video streaming has reached maturity. Netflix, Amazon Prime Video and Disney+ are the top 3 subscription services, with BBC’s iPlayer and YouTube taking the top spots for the free services.
  • TikTok, YouTube and Snapchat consume nearly an hour per day for those aged 15-24. Facebook stays busy with older age groups.
  • Radio remains consistently popular with 88% of adults listening for an average of 20 hours per week, though under-35s are more likely to stream music. BBC2 is the top radio station with 26% of adults listening in.
  • Spotify is the easy winner in the music streaming business taking over 70% of the adult market. Apple Music comes in 2nd with a paltry 8%.
  • For podcasts, 11 million adults (nearly 20% of the audience) listen to podcasts with 68% listening to five podcasts or less per week. While podcast listening is on the rise in nearly all age groups, those aged 15-24 have seen a decline in the last year.
  • Smart speakers are in 42% of homes, with Amazon’s Echo the easy market leader at 79%. Google Home is next at 15%.
  • The report also notes the use of AI DJs and synthetic voices as an incoming trend, highlighting Switch Radio using Chat GPT to create weather bulletins.

 

Coinbase To Fully Sunset Bitcoin-Backed Loan Program

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Coinbase will shut down the Borrow program for retail customers that enabled them to obtain cash loans using bitcoin as collateral, The Block reported.

According to The Block, in May, Coinbase said customers would no longer be able to take out new loans with Borrow. Now, the company says loan holders have until November 20 to pay any outstanding balances or the crypto exchange will sell the bitcoin collateral to close the loans, according to an email it sent to customers that was seen by The Block.

“We have decided to fully close Coinbase Borrow for retail users effective November 20, 2023, in order to focus our resources on the products and services that our customers care about most,” a Coinbase spokesperson told The Block. “We have notified impacted loan holders and are taking extra measures to ensure a smooth transition for them, including providing a four month loan repayment period and access to prioritized support through Coinbase One.”

Coinbase provided a Help article with questions users were asking. Here are a few of the questions:

What happens if I don’t pay back my loan by the due date?

If you have not repaid your loan by the due date we will sell your BTC collateral to pay back the outstanding loan. We will wave the 2% liquidation fee in this case. The liquidations will take place over 5 days, by gradually decreasing the LTV ratio at which we will liquidate at. This will enable us to minimize slippage of any BTC sell orders by spreading them out over time. You will receive an email notifying you of all liquidations. These may be partial liquidations of your collateral. Once your loan account is closed, you will receive a confirmation email.

Will my interest rate be impacted by this news?

No, your interest rate will remain the same over this time.

CoinDesk reported that Coinbase announced in May that it was no longer allowing Coinbase Borrow customers to take out new loans.

The California-based exchange has been under increased scrutiny by U.S. regulators, specifically the Securities and Exchange Commission (SEC), for its operations in the U.S., and has been doubling down on its businesses elsewhere.

Crypto Briefing reported that Coinbase Borrow was once a significant part of Coinbase’s portfolio. Coinbase Borrow had enabled users to secure fiat loans of up to $1 million, using up to 40% of their Bitcoin holdings as collateral. The service carried an annual interest rate of 8.7%

According to Crypto Briefing, closing Coinbase Borrow comes amid regulatory scrutiny of the platform’s services. The SEC charged Coinbase in June for operating as an unregistered securities exchange and for failure to register the offer and sales of its crypto asses staking-as-a-service program. However, Coinbase has not attributed the SEC charges with the end of its Borrow program.

In my opinion, CoinBase appears to be reaching out to customers who were using Coinbase Borrow to let them know how much time they have to pay back their outstanding loan. It seems like the company’s help page clearly explains the rate at which Coinbase will liquidate a borrower’s bitcoin. That’s better than expecting borrowers to pay back the loan all at once.

Evernote Laid Off Nearly All Of Its Employees

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Evernote logoEvernote has axed most of its workforce, Engadget reported. In a statement shared with SFGate, Bending Spoons, the Milan-based app developer that bought the company last November said Friday it had laid off nearly all of Evernote’s employees in the US and Chile.

According to Engadget, Bending Spoons plans to move most of the company’s remaining operations to Europe. The layoffs come less than six months after the firm cut 129 positions at Evernote because the app had been “unprofitable for years.” Bending Spoons didn’t share exactly how many employees were affected by this round of layoffs. A scan of LinkedIn reveals some software engineers that had been with Evernote for a few years lost their jobs on Friday.

Evernote posted “Moving the Evernote center of operations to Europe” on its Evernote News blog.

“On June 23, we announced to Evernote employees that most of our operations will be transitioned to Europe, the home of our parent company, Bending Spoons. We’re taking this step to boost operational efficiency and to make the most of the Bending Spoons employer brand, which is extremely strong in Europe.

Unfortunately, this transition required that most of our Chile- and US-based employees be laid offend on July 5 the layoff communication took place. We’re committed to supporting those impacted with a substantial separation package. In most cases, this package includes 16 weeks of salary, up to one year of health insurance coverage, and a performance bonus, paid pro-rata as if the year-end performance targets had already been achieved. We’re also offering additional support to those in need, such as impacted individuals who are on a visa.

Our plans for Evernote are as ambitious as ever: Going forward, a dedicated (and growing) team based in Europe will continue to assume ownership of the Evernote product. This team will be in an ideal position to leverage the extensive expertise and strength of the 400-plus workforce at Bending Spoons, many of whom have been working on Evernote full-time since the acquisition.

We’re extremely thankful for the efforts and commitment of all our departing colleagues, and we wish them the very best for the future.

Francesco Patarnello, CEO”

ArsTechnica reported that many people today, especially younger people, may have never heard of Evernote, which is part of the problem. Evernote’s core pitch – an easily accessed, tag-friendly, searchable notebook that syncs everywhere – was novel and ambitious when it publicly debuted in 2004.

According to ArsTechnica, Founder Stephan Pachikov, who had been developing the project since 2000, had also worked handwriting recognition for both Microsoft and Apple; a the time, an app that could keep everything paired up between a Pocket PC and a Windows XP computer, without any cable fuss, was novel!

I vaguely remember using Evernote back in the day, but had completely forgotten about it since then. Some people will experience nostalgia for the app, now that it is leaving the US and Chile. The only good thing about this situation is that Evernote is giving plenty of benefits to the employees who are being laid off. Very few companies will go that far!

FTC Says Genetic Testing Company Failed To Protect User Privacy

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The U.S. Federal Trade Commission posted a press release titled: “FTC Says Genetic Testing Company 1Health Failed to Protect Privacy and Security of DNA Data and Unfairly Changed Its Privacy Policy”. From the press release:

The Federal Trade Commission charged that the genetic testing firm 1Health.io left sensitive genetic and health data unsecured, deceived consumers about their ability to get their data deleted, and changed its privacy policy retroactively without without already notifying and obtaining consent from consumers whose data the company had the company had already collected.

As part of a proposed settlement with the FTC, 1Health will be required to strengthen protections for genetic information and instruct third-party contract laboratories to destroy all consumer DNA samples that have been retained for more than 180 days.

“Companies that try to change the rules by re-writing their privacy policy are on notice,” Said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection. “The FTC Act prohibits companies from unilaterally applying material privacy policy changes to previously collected data.”

California-based 1Health.io, Inc, also known as Vitagene, Inc. before changing its name in October 2020, has sold DNA health test kits and used DNA test results, along with information consumers supplied, to provide consumer with reports about their health, wellness, and ancestry as part of product packages that cost between $29 and $259. The health reports include personal information about a consumer’s health and genetics, such as their risk for developing health problems based on their genotype data…

…As part of the proposed order, 1Health.io, which Vitagene is now known as, must pay $75,000, which the FTC intends to use for consumer refunds. In addition to the DNA deletion requirement, under the proposed order the company:

  • Will be prohibited from sharing health data with third parties – including information provided by consumers before and after its 2020 privacy policy change – without obtaining consumers’ affirmative express consent;
  • Must ensure any company that purchases all or parts of 1Health’s business agrees by contract to adhere to provisions of the order;
  • Must notify the FTC about incidents of unauthorized disclosure of consumers’ personal health data; and
  • Must implement a comprehensive information security program addressing the security failures outlined in the complaint.

The Commission voted 3-0 to issue the proposed administrative complaint and to accept the consent agreement with the company…

The Federal Trade Commission wrote: …Vitagene, a San Francisco based DNA testing company, promised consumers that it exceeded industry-standard security practices for maintaining the privacy of people’s sensitive health and genetic information. But the FTC says the company didn’t keep that promise. In fact, the FTC says Vitagene use a well-known cloud service provider to store people’s confidential information but didn’t use built-in cloud security measures…

In my opinion, it sounds like Vitagene / 1Health.io lied to its customers about how secure their DNA information was. It seems fair that the FTC decided to crackdown on the company and make it pay a lot of money for its terrible choices.

Unlock the Power of Live Ad Reads: The Underutilized Tool in Podcast Advertising

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As digital audio continues to gain popularity among consumers, media buyers must understand the full potential of this medium. One often overlooked aspect of podcast advertising is live ad reads with host endorsements. Despite their proven effectiveness, many media buyers are unaware of the benefits they provide.

According to recent data from WARC, there is a significant gap between the time spent with digital audio and the share the medium receives from advertisers. This gap represents a considerable growth opportunity for podcasters and audio publishers. However, the challenge begins with awareness: nearly one in four marketers in the retail and consumer packaged goods categories are unaware of live-read ads. This lack of awareness contributes to lower adoption rates, with only 27% of marketers reporting that they have used live-read ads to date, compared to over 40% who have used recorded ads or branded content.

Addressing this awareness gap presents an opportunity for both the digital audio industry and advertisers. The live ad reads with host endorsements effectively generate an emotional connection with listeners. By educating media buyers about the benefits of live ad reads, the industry can help brands stand out and connect with their target audience on a deeper level.

Instacart CMO Laura Jones highlights the personal touch of the live ad reads in her company’s “The World is Your Cart” campaign. She explains that there’s something “delightful and organic” about being featured in the right podcast for your ideal audience. Media buyers need to recognize the unique advantages of live ad reads, such as fostering a stronger emotional connection with listeners than traditional recorded ads.

The WARC study on behalf of Spotify also found that consumer packaged goods brands are more optimistic about podcast advertising than retailers. These brands see the value in the highly engaged podcast audience, with 81% of CPG ad buyers agreeing that podcast listeners are highly engaged, compared to 71% for retail.

One of the most significant benefits of digital audio advertising is the potential for multichannel campaigns that deliver higher returns than single-channel campaigns. 62% of North American marketers surveyed by WARC saw substantial opportunities for combining podcast ads with social media ads, and 60% liked the idea of coupling social media with ads on music streaming services.

Charisse Hughes, Senior VP at Kellogg Company, highlights the differences between music streaming service ads and podcast ads, stating that the latter is more integrated into the content and intended to reach an engaged audience to drive product consideration and purchase intent.

As the digital audio landscape continues evolving, media buyers must explore the untapped potential of live ad reads with host endorsements. By educating themselves on the benefits of this advertising format and incorporating it into their strategies, they can help brands create more personal, engaging, and effective campaigns. With the right approach, live ad reads can be a powerful tool to connect with consumers and drive results.

Adding to the power of live ad reads, my personal experience as a podcaster demonstrates the long-term effectiveness of this advertising format. Since 2005, my podcast has been sponsored by GoDaddy, with live ad reads and host endorsements playing a crucial role in our continued success. As a testament to the value of host-read ads, our partnership has not only endured but also consistently met performance marks over the years.

As the podcast host, I have fostered a genuine connection with my audience, allowing my live ad reads for GoDaddy to resonate with listeners. By endorsing their products and services, I can share my personal experiences and create a sense of trust with my audience. This trust, in turn, translates into credibility for GoDaddy, making the ads more effective and impactful.

My long-standing partnership with GoDaddy also highlights the advantages of consistency and brand familiarity in advertising. Over the years, my audience has become accustomed to hearing me speak about GoDaddy’s offerings, strengthening the connection between the podcast and the brand. This familiarity can lead to increased brand recall and higher conversion rates.

In conclusion, my experience as a podcaster is a prime example of the power and long-term benefits of live ad read with host endorsements. By incorporating genuine connections, trust, and consistency into their advertising strategies, media buyers can unlock the full potential of live ad reads, creating more effective and engaging campaigns for their clients.

To capitalize on the opportunities provided by live ad reads, media buyers should recognize the value of host endorsements and actively seek partnerships that can create meaningful, long-lasting relationships with podcast listeners. By doing so, they can harness the full power of digital audio advertising, driving better results for their clients and fostering lasting connections between brands and consumers.

Download a copy of the WARC Sonic Boom study.
Photo by Isaac Smith on Unsplash